Description

Most countries having subsoil petroleum resources have legislated that those resources belong to the nation. Oil and gas companies can provide the capabilities required for effective and safe extraction of petroleum. The value obtained needs to be shared between the host nation and the companies licensed to carry out operations. This is the function of petroleum fiscal systems. The course introduces such systems existing in different countries, their basis in law and contracts, and how they may affect economics and decisions on petroleum developments. It also reviews some challenges of implementing and monitoring fiscal terms, including issues of transfer pricing and erosions of the fiscal basis of host nations.

As learning objectives, participants will upon completion of the course:

  • Recognise the context of petroleum fiscal terms in the jurisdiction’s legislation and licensing system for petroleum rights, including host government contracts;
  • Understand the most important fiscal instruments for petroleum;
  • Understand cash flow based project valuation including fiscal calculations;
  • Recognise how fiscal terms may affect economics and decisions on petroleum developments.
  • Recognise challenges in implementing and monitoring fiscal terms for petroleum.

Target Audience

  • Petroleum sector professionals concerned with international project development, government – company relations, and finances.
  • Civil service professionals with responsibilities in relation to the petroleum sector.
  • Professionals from the finance sector, suppliers and service providers working in relation to the petroleum sector.
  • Researchers, civil society professionals and reporters with an interest in the petroleum sector and its impacts on society.

Participants will receive a list of reading and viewing material as preparation for the course, depending on their previous knowledge.

Course Programme

Day 1

  • The legal basis for oil & gas activities
  • Background: Economic characteristics of petroleum developments
  • The fiscal instruments for petroleum extraction
  • Practice tasks and 1-to-1 support

Day 2

  • State participation as a fiscal and strategic instrument
  • Business obligations with fiscal effects: Local content, domestic supply, and others
  • Petroleum fiscal systems of selected jurisdictions
  • Challenges of valuation for fiscal control
  • Practice tasks and 1-to-1 support

Day 3

  • Project economics with fiscal calculations
  • Calculation practice *
  • Issues of fiscal design
  • Licensing process and fiscal transparency
  • Summary, questions and final discussion

* To fully benefit from the calculation practice on Day 3, participants should have MS Excel software available to use.

Course Presenter

Jarlsby ErikDr Erik Jarlsby is the lead author of a recent book on Petroleum Fiscal Systems (PennWell Books, 2019) and a co-author of a book on Petroleum Resources (WIT Press, 2010). He is an independent consultant and lecturer based in Norway, having previously worked in professional and managerial positions in two large oil companies and a petrochemical company. Dr Jarlsby has taught courses on petroleum economics, resource management and corporate strategy in more than 20 countries. He has consulted with government institutions of several countries, oil and gas companies and other companies on petroleum management and business development.